Silicon Valley’s Rendezvous

A secret meeting has been held over the past few days in Silicon Valley between Core devs and Chinese Miners and price has plummeted from its enticing $666 level to local lows around $610. It has been stated that this meeting is just to clear the air with no particular agenda or consensus to be made (given that there is a Scaling Bitcoin event to be held in October). The timing is of interest, if not coincidental, given that the SegWit hard-fork proposal had somewhat of a July-end timeline attached to it.

For those needing a refresher, given that ETH, DAO and ETC have been stealing the spotlight recently, aroundtable was had in Hong Kong in February where a consensus was reached that the hard-fork code will be available in early July 2016, and if there is strong community support it will be activated in July 2017. The Terminator Plan then surfaced, supposedly by Chinese miners, on the lethargic nature of which Core devs were approaching to this agreement. These events proved bullish in price for Bitcoin, hoping to give clarity to an otherwise stale future for the cryptocurrency.

So is this dump a signal of what is being discussed and thus a correction of those pumps? Could this signal further stalemate in the future of the blocksize debate and lead Bitcoin into a slow death as traders move into other cyrptos such as ETC? No doubt we will find out over the next few days or week as details about this meeting come out.

However, this price move could have been explained by technical analysis (as most things can in retrospect). $640 remained the critical level. Several times did we bounce off this lower range up to $660 – $680 levels, however this time Bitcoin pushed on. A descending triangle on the 4HR chart can be seen starting from mid-June, with Bitcoin failing to break it.

We are now seeing a support range of $580 – $610 right now, still above the 200 SMA. If Bitcoin does not hold this level we may see moves towards a more “structural support” level of $450, prices not seen until before the halving.

Look for short-term shorts on XBTUSD, placing tight stops in case of a surprise from The Secret Meeting. Happy Trading!